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The main concern of farmers who sell their crops rather than feed it to their livestock is that corn and soybean prices have been declining since June, after being relatively high for the past couple years.
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Nathan Batzel harvests soybeans on the Rolling Acres farm in Bangor.
PETER THOSMON photo |
Corn topped $7 a bushel and approached $8 in mid-summer, but has since fallen back to below $4.
Soybeans were selling for more than $16 a bushel in June, but now are bringing less than $9 a bushel.
Paul Schomberg of Barre Mills, his brother John and father, Fred, finished harvesting their 700 acres of soybeans a week ago and began combining corn Wednesday. The Schombergs hope to finish harvesting their 1,200 acres of corn by mid-December.
Their soybean yields ranged from about 20 to 60 bushels an acre, depending on the field, and probably averaged about 40 bushels an acre, Paul said. That’s a pretty typical soybean harvest for the Schombergs, he said.
“It was dry, though,” this year, Schomberg said. “We could have used more rain.”
Crop sold in advance
Fortunately, Schomberg said, the family sold nearly all of its 2008 soybean crop a few months ago, locking in prices of $11 to more than $15 a bushel for various amounts. And they sold about one-third of their corn crop in advance, locking in prices of $4 to $5 a bushel, he said.
“Luckily, we got quite a bit contracted when the prices were still good,” Schomberg said. The Schombergs will use the money to pay off operating loans.
Schomberg said he also might buy a larger soybean head for his combine in the next few months, so the combine can complete the harvest faster.
“I think everybody’s kind of catching up on (paying off) their loans,” Schomberg said of how farmers have benefited from higher prices in the last couple years. “I don’t think anyone’s getting rich. Because you have high input costs on corn. The seed went up, fertilizer went up, spray went up, diesel fuel went up.”
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Farmers benefited from higher prices
“I think it depends on what stage of farming they’re in,” Steve Huntzicker, University of Wisconsin-Extension agriculture adviser in La Crosse County, said of the effect of higher corn and soybean prices on the farmers who grow the crops for sale.
“Some of them had the equipment (they needed) and have used (the money) to pay down some operating loans or other debt,” Huntzicker said. “Others updated equipment if it was needed; they might have put that off because of tougher times” a few years before.
With corn and soybean prices declining in the past few months, and seed and other input costs remaining high, “The window might be more tight for making a profit,” Huntzicker said.
The county’s corn and soybean crops matured later than usual because of wet weather in late May and in June, he said. And with high propane prices, farmers are letting corn and soybeans dry in the fields as long as they can, rather than harvesting them early and putting them in a dryer.
80 percent of county’s soybean crop harvested
Huntzicker estimated 80 percent of La Crosse County’s soybean crop, and perhaps 25 percent of its corn crop, have been harvested.
“Yields are all over the board,” he said. “For soybeans, we’ve seen yields from the teens up to 40 or 50 bushels an acre,” he said. “It’s a pretty average year for soybeans, but the fields were spotty” because of dry weather in August and part of September.
Huntzicker said he hasn’t heard many reports yet about corn yields. “My guess is we’ll see pretty mixed results” because the dry weather especially affected crops planted on sandy soil, he said. But the county’s average corn yield probably will be fairly typical, he said.
Farmers happy with yields
“Overall, I think farmers have been pretty happy (with yields), especially with corn,” said Monte Wick, general manager of Farmers Co-op Supply and Shipping Association in West Salem.
“Soybean yields are average or maybe just slightly less than expected,” Wick said. “But I think corn yields generally are better than expected. We had kind of an extended dry period and there was a lot of concern over what the yields were going to be.”
About 28 percent of Wisconsin’s corn crop has been harvested, the Wisconsin field office of the National Agricultural Statistics Service said Monday in its weekly crop progress report. That compares with 50 percent at the same time last year and a five-year average of 43 percent.
The agency said 85 percent of the state’s soybean crop has been harvested, compared with 65 percent a year ago and a five-year average of 77 percent.
Concern about demand brings lower prices
But farmers who sell their crops still are concerned about the recent decline in corn and soybean prices.
Cash corn prices in many areas are at the lowest level since October 2007 and cash soybean prices are at the lowest level since August 2007, University of Illinois Extension Economist Darrell Good said Monday in his weekly outlook report. “While still high by historic standards, current prices are low in relation to the much higher costs of production experienced in 2008 and anticipated for 2009,” he said.
Good said much of the recent decline in corn and soybean prices reflects concerns about current and future demand for those two commodities. Prospects of an economic slowdown threaten the robust domestic and export demand for U.S. agricultural commodities enjoyed over the past two years, he said. And declines in crude oil, gasoline and ethanol prices have kept pressure on corn prices, he said.
Crop prices affect others
Many farmers lock in prices in advance, and only the smallest family farms still sell at the spot price, said T.J. Brooks, associate professor in the University of Wisconsin-La Crosse Department of Economics. “So the recent fall (in prices) might not have an immediate effect, but might affect what gets planted next year.
“I would imagine that the rise in prices has helped the crop farmers improve their balance sheets,” Brooks said. “But remember a lot of them are animal farmers, dairy and the like, and higher crop prices have meant higher feed prices, so it hasn’t been all roses.”
“There seems to be a return to normalcy from a historical standpoint, with a lot of the speculation in the commodity markets not taking place anymore,” Bank of Cashton President Scot Wall said of the recent decline in corn and soybean prices.
“You hope the (cash grain) farmers were able to take advantage of those very high potential prices that were available in the summer” by locking in prices in advance, Wall said. Many farmers in the Cashton area grow corn and soybeans to feed their own livestock and didn’t benefit from the run-up in prices the way that a cash grain farmer would, he said.
By the numbers
La Crosse County average yields:
CORN
Year Average yield per acre
2003 127 bushels
2004 144 bushels
2005 161 bushels
2006 148 bushels
2007 146 bushels
SOYBEAN
Year Average yield per acre
2003 30 bushels
2004 39 bushels
2005 56 bushels
2006 48 bushels
2007 41 bushels
SOURCE: U.S. Department of Agriculture’s National Agricultural Statistics Service
